Foreign Direct Investment (FDI) as a foreign investment refers to investment by a foreign company in a particular country. Most countries to attract foreign direct investment for a variety of reasons, most of which are beneficial to the investors. The usual foreign investment includes acquisitions of tangible assets in the form of plants and equipment.
In the U.K., FDI is primarily from the EU. FDI in the U.K. covers almost all types of foreign investment including the purchase of property, the establishment of joint ventures, the construction of retail outlets, the lease of office space, the development of natural resources, and even the provision of telecommunications infrastructure. There are also many sectors in the U.K. where foreign investment is not allowed.
In Canada, FDI is concentrated in three categories. These include commercial properties (i.e. office space, retail stores), energy, transportation, financial and technology. It should be noted that some non-profit organizations and private foundations are allowed to make investments in the U.K. and Canada as long as the investment does not exceed $100 million annually.
In the U.S., FDI mainly takes the form of acquisitions, acquisitions in the form of real estate, the purchase of properties to increase the value of an already existing business, or the development of companies or institutions. There are some companies that do acquire and develop businesses for their own profit and for the benefit of the investor. However, these are not usually permitted by the government.
One of the most prominent types of FDI, and a common theme among the U.S. and Canada, are related to the Internet. Many companies that are not available to the general public can be found on websites. This type of FDI is considered to be passive or long term because the company will not be making a large investment in order to create a business, and the money would only go towarda company’s initial requirements.
Another form of FDI is telecommunications infrastructure. These networks are necessary in any society, and are the main reason why we have developed the Internet. FDI into telecommunications infrastructure is usually a mutual partnership between a foreign investor and a country. Typically, the investor will invest in the country, and then they will finance the construction of the infrastructure.
In certain countries, including South Korea, Japan, Hong Kong, and China, FDI is considered to be a particularly good way to boost economies. Foreign direct investment can also be used to build a company’s brand, create jobs, and protect the country’s intellectual property. Some countries, like the U.K., will allow foreign direct investment if the venture is at least one million pounds.
To get a sense of foreign direct investment, you can look at how businesses in foreign countries are treated as well as what countries have FDI restrictions. You can also see which industries have the greatest potential in terms of profit and market share.
